Tax on beer-the reason for a drop in sales or is there a more obvious reason?

[John Short]

UK beer sales drop in Q3 – need for urgent freeze of Beer Duty escalator, say brewers and pubs - BBPA ‘Beer Barometer’
23/10/12

•   Pub sales down 4.8 per cent on Q3 last year, with off-trade sales down 6.5 per cent
•   Huge need for tax policy change - 100,000 people call for an end to Beer Duty escalator
•   MPs meet today, to push for fresh debate in Parliament
Government tax policy is damaging the crucial brewing and pub sector, with UK beer sales falling by 5.6 per cent in the third quarter of 2012, according to the British Beer & Pub Association’s latest UK Quarterly ‘Beer Barometer’, published today.

The figures mean that despite the benefits of the Olympics and Euro 2012, beer drinkers enjoyed 117 million fewer pints of beer in Q3 compared with 2011. The reduction in sales is hitting Government revenues as well as jobs, says the BBPA. Analysis from Oxford Economics indicates that a duty freeze in March 2013 would save 5,000 jobs in the sector, which employs almost 1 million people – mostly younger people in Britain’s pubs.

The fight for a fairer tax deal moves up a gear today, with MPs who champion the sector pushing for a full Parliamentary debate on the impact of the escalator, following a petition signed by over 100,000 calling for Government action on the issue. British beer has endured an astonishing 42 per cent tax hike since March 2008. A further, two per cent above inflation increase proposed for Budget 2013 is set to take the figure towards a staggering 50 per cent.

Sales of beer in pubs fell by 4.8 per cent in Q3, with 51 million less pints poured for pubgoers than in the same period in 2011. Supermarkets and off-license sales were down by 6.5 per cent.

Brigid Simmonds OBE, Chief Executive of the British Beer & Pub Association comments:

“If the Government wants to encourage growth, back British business and support local communities, then it must end the Beer Duty escalator.

“The Chancellor must listen to the thousands of people now calling for a change, so the sector can grow, create jobs and contribute more to UK plc.”
Beer Tax - more key figures:

•   Beer tax (Duty plus VAT) per pub: £66,500
•   Average price of a pub pint of beer: £3.17
•   Duty on a 5 per cent pint of beer: 55p
•   Beer duty increase since March 2008: 42%
•   British Beer Tax, times higher than France: 9
•   British Beer Tax, times higher than Germany: 13
http://www.beerandpub.com/news/uk-beer-sales-drop-in-q3-need-for-urgent-freeze-of-beer-duty-escalator-say-brewers-and-pubs-bbpa-beer-barometer


Anything similar from other countries? Or is just the quality of beer?  A period of working in Eastern Europe/Balkans has honed my taste buds and now rarely drink the stuff here apart from an Ouseburn trek in sunny Newcastle.

[harnett]

So the non-elastic goods appear to be so no longer.  Cigarettes must contribute little to the exchequer and the issue now for beer is whether the fall in sales is impacting on total revenue gained.  Surely that would be the Exchequer's calculation.  Having said that I'd be wary of the x9 tax here compared to France.  I'm sure I read recently that the French are bringing in a whopping increase on beer tax.

[STONE]

All elastic things stretch but they all break at some point

[John Short]

Budget 2013 - new report makes compelling case for beer duty freeze says industry association

• Beer duty freeze would raise Government revenues overall
 • 10,000 jobs protected up to 2015, mostly in pubs
 • Action needed now, says BBPA Chief Executive
 

A clear and compelling case has been made for a freeze in the tax on beer, in a new report published today by a leading industry trade body. In ‘Beer, Pubs & the Budget 2013’, the British Beer & Pub Association says that ending the Government’s controversial and unpopular beer duty ‘escalator’ in the March Budget would save thousands of jobs - without ANY overall loss of revenue to the Treasury.


If the Government goes ahead with plans to raise the tax on beer by five per cent in the Budget, this will bring the rise in Beer Tax to a staggering 50 per cent over the past five years. The policy is having a damaging effect on jobs in Britain’s pubs, says the BBPA, where 70 per cent of drinks’ sales are beer – the vast majority brewed here in Britain. Research in the report says that if beer duty were frozen in the Budget, this would save over 5,000 jobs, increasing to nearly 10,000 by 2014/15 – mostly jobs for younger people in pubs.

Budget 2013 - new report makes compelling case for beer duty freeze

The report also finds that far from raising more in taxes, the policy is failing to bring in additional revenues. Leading researchers Oxford Economics estimate that despite a slight drop in beer duty revenues, a tax freeze would raise an additional £5 million in revenue across the whole tax base, mainly through a significant boost to employment tax revenues, and avoiding social security payments from reduced employment in pubs. In contrast, even the Treasury’s own current forecasts show that less will be raised from beer duty in 2013/14 compared with the previous year – yet further tax hikes are planned.


The report shows that beer taxes in Britain have now reached unprecedented levels. Beer Tax is higher than in any other EU country bar Finland, and is now 13 times higher than in Germany. British Brewers now pay an astonishing 50 per cent of their turnover in beer duty, damaging growth and investment in this key, British-made product. UK beer drinkers now pay 40 per cent of the beer tax across the EU, but only consume 13% of its beer.

[Napodano]

Time to shift to wine! 

[John Short]

High excise taxes on wine as well!